Lowell AG has used the accrual basis of accounting for several years. A review of the records, however, indicates that some expenses and revenues have been handled on a cash basis because of errors made by an inexperienced bookkeeper. Income statements prepared by the bookkeeper reported €29,000 net income for 2018 and €37,000 net income for 2019. Further examination of the records reveals that the following items were handled improperly.

1. Rent was received from a tenant in December 2018. The amount, €1,000, was recorded as income at that time even though the rental pertained to 2019.

2. Salaries and wages payable on December 31 have been consistently omitted from the records of that date and have been entered as expenses when paid in the following year. The amounts of the accruals recorded in this manner were:

December 31, 2017........................€1,100

December 31, 2018..........................1,200

December 31, 2019............................940

3. Invoices for office supplies purchased have been charged to expense accounts when received. Inventories of supplies on hand at the end of each year have been ignored, and no entry has been made for them.

December 31, 2017........................€1,300

December 31, 2018............................940

December 31, 2019..........................1,420

Instructions

Prepare a schedule that will show the corrected net income for the years 2018 and 2019. All items listed should be labeled clearly. (Ignore income tax considerations.)